This article regresses the market value of equity on pre-depreciation income and on depreciation expense for capital-intensive firms, referring to the coefficients from our model as valuation weights. The valuation weight on depreciation expense versus the weight on pre-depreciation income are...

As a direct response to the recent trend in corporate expatriations, politicians have questioned the patriotism of firms that reorganize outside the U.S. and introduced numerous legislative proposals designed to prevent corporate expatriations. The implicit assumption made in proposing this...

This study presents empirical evidence concerning the effect of different accounting standard on earnings management. Prior studies have shown that accounting standards influence earnings management. Tighter accounting standards regime restricts management's descretion to manipulate accruals,...

This paper examines how simultaneous presence of domestic accounting standards of various countries affects market reactions to firms' earnings announcements and subsequent post-earnings announcement drifts (PEAD) in U.S market. Drawing from the finance and accounting literatures on investors'...

Using a large sample of domestic and foreign IPOs in the US, we investigate how threats of enforcement by the Securities and Exchange Commission (SEC) and private litigation influence earnings management in IPO prospectuses. We propose that perceptions of foreign institutions may influence SEC...

This study examines how key market participants — managers and analysts — responded to SFAS 123R's controversial requirement that firms recognize stock-based compensation expense. Despite mandated recognition of the expense, some firms' managers exclude it from pro forma earnings and some...

Li (2011) proposes a quarterly earnings prediction model for loss generating firms, shows that it produces better specified future earnings estimates relative to naïve quarterly forecast models, and that it can be used to form a trading strategy that produces economically significant annual...

This paper proposes and evaluates several market-based measures for US and eurozone individual bank tail risk and banking system risk. We apply statistical extreme value analysis to the tails of bank equity prices to estimate the likelihood of individual institutions financial distress as well...

In this paper, we present a review of tax research. We survey four main areas of the literature: 1) the informational role of income tax expense reported for financial accounting, 2) corporate tax avoidance, 3) corporate decision-making including investment, capital structure, and organizational...

Compelling empirical evidence documenting a material effect of corporate taxes on leverage decisions is limited, in part because of difficulties in constructing an effective proxy for the firm's tax benefit of debt. We examine leverage decisions across taxable and nontaxable real estate firms...